AIRBUS yesterday announced that it was freezing recruitment at its factory near Chester because of the crisis facing airlines following the terrorist atrocities.

This means that about half the 1,700 new jobs to have been created at Broughton to build wings for the new superjumbo A380 will be put on hold.

But the European Aeronautic Defence and Space (EADS) Company, which owns 80pc of Airbus, insisted yesterday that development of the A380 would continue as planned.

Apprenticeships will not be affected and all job offers will be honoured.

EADS yesterday revealed healthy halfyear profits, which come mainly from Airbus, and predicted it would still be on course for healthy profit growth by 2004.

But some investors believe its forecasts are excessively optimistic.

Relieved union leaders and politicians welcomed yesterday's news that jobs would not be lost. Many had feared the worst in the light of up to 30,000 redundancies announced by Airbus' main rival, Boeing, on Wednesday.

Production of Airbus wings will be kept at current levels and not increased, as had been expected.

A spokeswoman for BAE, which has a 20 pc stake in Airbus, said: "Production rates have been frozen at current levels which means we'll deliver about 320 aircraft this year. It's difficult to be precise about next year.

"Additional investment and recruitment have been put on hold, with the exception of the investment in the A380 development. There will be no lay-offs and the workforce is stable, which is good news."

The spokeswoman added: "We've already recruited more than half the 1,700. The rest goes on hold and we need to review that in the light of future developments. Any job offers we've made in writing will be honoured and recruitment of apprentices will continue as planned."

EADS' chief executives, Philippe Camus and Rainer Hertrich, said in Amsterdam yesterday: "We're well aware of the risks on international business caused by the recent and contemptible acts of terrorism in the US.

"However, although it's too early to know all the future implications we might face, the management is actively taking steps to maintain utmost flexibility and ensure healthy margins.

"We're taking all appropriate measures to stay on track, including freezing certain investment and capacity extensions."